The federal judge overseeing the Indian trust fund sanctioned the government on Tuesday for "misleading" his court by falsely claiming to have records of an historical accounting.

In court papers filed during the Clinton administration, the Department of Interior argued it wasn't required to account for the entire Individual Indian Money (IIM) trust, created in 1887 to keep track of oil, gas and other Indian assets. Attorneys for then-Secretary Bruce Babbitt said the General Accounting Office (GAO) reconciled funds as far back as 1951.

But senior officials possessed evidence to the contrary, U.S. District Judge Royce Lamberth wrote in a 15-page decision. Yet they went ahead and sought to limit an accounting owed to more than 500,000 American Indians, prompting Lamberth to punish the government for engaging in "egregious misconduct," a similar charge he laid when he held Secretary Gale Norton and former Indian affairs aide Neal McCaleb in contempt.

"Given the pattern of deceit by defendants that was demonstrated in the factual findings made at the conclusion of the second contempt trial in this case, the court is unwilling to turn a blind eye to yet another demonstration of defendants' misconduct and their willingness to mislead the court and to misrepresent the truth whenever it suits them," Lamberth concluded.

Lamberth declined to hold another contempt trial to address the government's actions. Keith Harper, a Native American Rights Fund (NARF) attorney representing the Indian account holders, said the ruling was a victory nonetheless.

"It's extraordinarily telling for a federal judge to note that the federal government lies at will," he said.

In the midst of her contempt trial more than a year ago, Norton withdrew the motions in question. Lamberth in March 2002 granted her request but questioned the government's truthfulness.

He confirmed those feelings with yesterday's ruling, castigating the government for trying to "deceive" the court by submitting an "affidavit containing false and misleading representations of fact." The affidavit, signed by a GAO official, repeated the claim that the GAO audited the trust fund accounts.

Lamberth also said the government tried to shift blame to the Cobell plaintiffs. "As dubious assertions go, this ranks down at the bottom with 'It depends on what the meaning of the word ‘is’ is,'" he wrote.

Although the incident occurred primarily during the Clinton administration, officials involved still work for Norton. Bob Lamb, a deputy budget official, was confronted during the contempt trial about the GAO-related claims, but discounted the evidence against the department.

Lamb's superior, John Berry, the former assistant secretary for policy, management and budget, was told in an August 1999 letter that the GAO had no documents of IIM audits. When shown the letter, Lamb, who also received a copy, said: "I honestly don't recall the paragraph saying that."

The plaintiffs have 30 days to file a motion to recover attorneys' fees used to respond to the government's arguments. Harper said it would run in the tens of thousands.